Question 1

-In Exhibit C-10, a shift in the demand from D1 to D2 represents a(n)

Accepted Answer

A)  increase in demand 
B)  increase in the quantity demanded 
C)  decrease in the quantity demanded 
D)  decrease in demand 
E)  decrease in supply 
A)  increase in demand 
B)  increase in the quantity demanded 
C)  decrease in the quantity demanded 
D)  decrease in demand 
E)  decrease in supply

Question 2

When the market generates an equilibrium price, we know that

Accepted Answer

A)  the quantity demanded is higher than the quantity demanded associated with a market that is not in equilibrium 
B)  excess demand and excess supply are zero 
C)  increases in quantity demanded are matched by increases in quantity supplied 
D)  it is the most profitable price for suppliers 
E)  all demanders who want the good will get it 
A)  the quantity demanded is higher than the quantity demanded associated with a market that is not in equilibrium 
B)  excess demand and excess supply are zero 
C)  increases in quantity demanded are matched by increases in quantity supplied 
D)  it is the most profitable price for suppliers 
E)  all demanders who want the good will get it

Question 3

-In Exhibit C-5, if price is $25, a(n) ___ would result, causing a(n)___ in price.

Accepted Answer

A)  excess demand; increase 
B)  excess demand; decrease 
C)  excess supply; increase 
D)  excess supply; decrease 
E)  scarcity; stabilization 
A)  excess demand; increase 
B)  excess demand; decrease 
C)  excess supply; increase 
D)  excess supply; decrease 
E)  scarcity; stabilization

Question 4

Which of the following would cause a decrease in the demand for film?

Accepted Answer

A)  a decrease in the price of film processing 
B)  an increase in the price of film 
C)  an increase in income of camera users 
D)  an increase in the price of cameras 
E)  an increase in supply of cameras 
A)  a decrease in the price of film processing 
B)  an increase in the price of film 
C)  an increase in income of camera users 
D)  an increase in the price of cameras 
E)  an increase in supply of cameras

Question 5

An increase in market supply will increase price.

Accepted Answer

A) True 
 B)False

Question 6

-In Exhibit C-7, the curve labeled S2 represent a

Accepted Answer

A)  short-run supply curve 
B)  demand-related supply curve 
C)  long-run supply curve 
D)  quantity-related supply curve 
E)  market-day supply curve 
A)  short-run supply curve 
B)  demand-related supply curve 
C)  long-run supply curve 
D)  quantity-related supply curve 
E)  market-day supply curve

Question 7

In the long run,

Accepted Answer

A)  output, once determined, cannot be changed 
B)  price, once determined, cannot be changed 
C)  land and capital cannot be changed 
D)  all inputs are variable, that is, the quantities of all inputs can be changed 
E)  labor can be changed, but all other inputs are fixed 
A)  output, once determined, cannot be changed 
B)  price, once determined, cannot be changed 
C)  land and capital cannot be changed 
D)  all inputs are variable, that is, the quantities of all inputs can be changed 
E)  labor can be changed, but all other inputs are fixed

Question 8

-Which of the following would result in the changes shown in Exhibit C-2 on the previous page (where S and D represent the initial supply and demand for Smids)?

Accepted Answer

A)  Tastes for smids declined and incomes decreased. 
B)  The cost of producing smids increased and consumer tastes for smids declined. 
C)  Consumer incomes increased and production technology for smids improved. 
D)  The population increased and the input costs for smids increased. 
E)  Production technology improved and the price of Quids, a substitute good, declined. 
A)  Tastes for smids declined and incomes decreased. 
B)  The cost of producing smids increased and consumer tastes for smids declined. 
C)  Consumer incomes increased and production technology for smids improved. 
D)  The population increased and the input costs for smids increased. 
E)  Production technology improved and the price of Quids, a substitute good, declined.

Question 9

The market demand for a good is derived by summing all the individual demands.

Accepted Answer

A) True 
 B)False

Question 10

Excess demand or excess supply will always drive price back to equilibrium in a freemarket.

Accepted Answer

A) True 
 B)False

Question 11

If the price of a good is below its equilibrium level, then

Accepted Answer

A)  an excess supply will result 
B)  quantity supplied exceeds quantity demanded 
C)  the supply curve will shift to the right 
D)  quantity demanded exceeds quantity supplied 
E)  the demand curve will shift to the left 
A)  an excess supply will result 
B)  quantity supplied exceeds quantity demanded 
C)  the supply curve will shift to the right 
D)  quantity demanded exceeds quantity supplied 
E)  the demand curve will shift to the left

Question 12

In economics, the short run refers to a period of time in which

Accepted Answer

A)  demanders can change their minds about what to buy at what prices 
B)  demanders and suppliers can negotiate prices 
C)  price is fixed 
D)  suppliers can change some, but not all, of their inputs 
E)  output is fixed 
A)  demanders can change their minds about what to buy at what prices 
B)  demanders and suppliers can negotiate prices 
C)  price is fixed 
D)  suppliers can change some, but not all, of their inputs 
E)  output is fixed

Question 13

Which of the following pairs of goods is the best example of substitute goods?

Accepted Answer

A)  Borden's milk and Nabisco cookies 
B)  Goodyear tires and Ford automobiles 
C)  Exxon gasoline and Ford automobiles 
D)  McDonald's Big Mac and Wendy's grilled chicken sandwich 
E)  Dell computers and Microsoft software 
A)  Borden's milk and Nabisco cookies 
B)  Goodyear tires and Ford automobiles 
C)  Exxon gasoline and Ford automobiles 
D)  McDonald's Big Mac and Wendy's grilled chicken sandwich 
E)  Dell computers and Microsoft software

Question 14

A normal good is defined as one

Accepted Answer

A)  having a downward-sloping demand curve 
B)  that is neither a luxury nor a basic good 
C)  that is bought by consumers with normal tastes 
D)  whose demand increases when incomes increase 
E)  whose demand decreases when incomes increase 
A)  having a downward-sloping demand curve 
B)  that is neither a luxury nor a basic good 
C)  that is bought by consumers with normal tastes 
D)  whose demand increases when incomes increase 
E)  whose demand decreases when incomes increase

Question 15

If people expect the price of automobiles to increase drastically next year, it is likely that the demand curve for this year's automobiles will shift to the right.

Accepted Answer

A) True 
 B)False

Question 16

-In Exhibit C-6, if there is a surplus of 200 radios, price must be

Accepted Answer

A)  $60 
B)  $55 
C)  $50 
D)  $45 
E)  $40 
A)  $60 
B)  $55 
C)  $50 
D)  $45 
E)  $40

Question 17

In August 2005, hurricane Katrina hit the Gulf States damaging approximately 20 percent of our oil refining capacity. This event

Accepted Answer

A)  resulted in a massive building of new refining capacity which shifted the supply curve of gasoline to the left 
B)  shifted the supply curve of gasoline to the left thereby raising its price 
C)  shifted the demand curve of gasoline to the right because less gasoline was available 
D)  resulted in an inward shift in both the supply curve of gasoline and the demand curve for gasoline because less gasoline was available and, as a result, there was less demand for gasoline 
E)  resulted in an outward shift in both the supply curve of gasoline and the demand curve for gasoline because less gasoline was available and, as a result, there was less demand for gasoline 
A)  resulted in a massive building of new refining capacity which shifted the supply curve of gasoline to the left 
B)  shifted the supply curve of gasoline to the left thereby raising its price 
C)  shifted the demand curve of gasoline to the right because less gasoline was available 
D)  resulted in an inward shift in both the supply curve of gasoline and the demand curve for gasoline because less gasoline was available and, as a result, there was less demand for gasoline 
E)  resulted in an outward shift in both the supply curve of gasoline and the demand curve for gasoline because less gasoline was available and, as a result, there was less demand for gasoline

Question 18

A demand curve is upward sloping because as the price decreases the quantity demanded decreases.

Accepted Answer

A) True 
 B)False

Question 19

-In Exhibit C-3, which of the graphs shown displays a market-day supply?

Accepted Answer

A)  I 
B)  II 
C)  III 
D)  IV 
E)  V 
A)  I 
B)  II 
C)  III 
D)  IV 
E)  V

Question 20

Software programs have been introduced that allow you to use your personal computer like a telephone to talk to others who own the same software. One such program costs $50 to buy and allows you to make unlimited calls for free. The economics of substitutions and complements are present in this scenario.
 a. Explain in economic terms the effect of these products on the market for long distance telephone service.
 b. Explain in economic terms the effect of these products on the market for personal computers.

Accepted Answer

a. Since these computer calls are substi

-In Exhibit C-10, a shift in the demand from D₁ to D₂ represents a(n)

When the market generates an equilibrium price, we know that

-In Exhibit C-5, if price is $25, a(n) _ would result, causing a(n)_ in price.

Which of the following would cause a decrease in the demand for film?

An increase in market supply will increase price.

-In Exhibit C-7, the curve labeled S₂ represent a

In the long run,

-Which of the following would result in the changes shown in Exhibit C-2 on the previous page (where S and D represent the initial supply and demand for Smids)?

The market demand for a good is derived by summing all the individual demands.

Excess demand or excess supply will always drive price back to equilibrium in a freemarket.

If the price of a good is below its equilibrium level, then

In economics, the short run refers to a period of time in which

Which of the following pairs of goods is the best example of substitute goods?

A normal good is defined as one

If people expect the price of automobiles to increase drastically next year, it is likely that the demand curve for this year's automobiles will shift to the right.

-In Exhibit C-6, if there is a surplus of 200 radios, price must be

In August 2005, hurricane Katrina hit the Gulf States damaging approximately 20 percent of our oil refining capacity. This event

A demand curve is upward sloping because as the price decreases the quantity demanded decreases.

-In Exhibit C-3, which of the graphs shown displays a market-day supply?

Introduction

Production Possibilities and Opportunity Costs

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Price and Output Determination Under Oligopoly

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wage Rates in Competitive Labor Markets

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

The Economic Problems of Less-Developed Economies

Filters

Exam 3: Demand and Supply

-In Exhibit C-10, a shift in the demand from D1 to D2 represents a(n)

When the market generates an equilibrium price, we know that

-In Exhibit C-5, if price is $25, a(n) ___ would result, causing a(n)___ in price.

Which of the following would cause a decrease in the demand for film?

An increase in market supply will increase price.

-In Exhibit C-7, the curve labeled S2 represent a

In the long run,

-Which of the following would result in the changes shown in Exhibit C-2 on the previous page (where S and D represent the initial supply and demand for Smids)?

The market demand for a good is derived by summing all the individual demands.

Excess demand or excess supply will always drive price back to equilibrium in a freemarket.

If the price of a good is below its equilibrium level, then

In economics, the short run refers to a period of time in which

Which of the following pairs of goods is the best example of substitute goods?

A normal good is defined as one

If people expect the price of automobiles to increase drastically next year, it is likely that the demand curve for this year's automobiles will shift to the right.

-In Exhibit C-6, if there is a surplus of 200 radios, price must be

In August 2005, hurricane Katrina hit the Gulf States damaging approximately 20 percent of our oil refining capacity. This event

A demand curve is upward sloping because as the price decreases the quantity demanded decreases.

-In Exhibit C-3, which of the graphs shown displays a market-day supply?

Introduction

Production Possibilities and Opportunity Costs

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Price and Output Determination Under Oligopoly

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wage Rates in Competitive Labor Markets

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

The Economic Problems of Less-Developed Economies

Filters

-In Exhibit C-10, a shift in the demand from D₁ to D₂ represents a(n)

-In Exhibit C-5, if price is $25, a(n) _ would result, causing a(n)_ in price.

-In Exhibit C-7, the curve labeled S₂ represent a